A TECHNICAL VIEW ON CNX--NIFTY--2-4-2018

CNX-NIFTY

Open-10143.60—High-10158.35---Low—10096.90---Close—10113.70 on 28-3-2018

Support: 10094/10074.80/10049.10/10033.35/9982.75/9955.80/9951.90/9944.50/9919.44--9914/9792.05/9740.10/9709.30/9685.55.

Resistance: 10124.50/10137.85/10139.65/10141.55/10178.95/10207.90/10227.30/10251.85.

For-2-4-2018 the intra-day important support and resistance levels are given here-under:-

Support: 10094/10074.80/10069/10049.10/10033.35/9995/9982.75/9955.80/9951.90/9944.50/9919.44--9914/9903/9792.05/9740.10/9709.30/9685.55.

                                                                                                

Resistance: 10124.50/10137.85/10139.65/10141.55/10147/10162/10178.95/10191.17/10207.90/10227.30/10251.85.

  

Further to my last post of 26.3.2018, the broad observation remains the same. It staged a bounce back and moved up for two days and filled the gap it created on 23.3.2018(it was expected) but failed to cross important hurdles and finally ended the truncated week on a weak note. It is exhibiting high volatility and this may continue, but the trend is down for sure now and it is likely to seek lower levels in coming weeks/months, however in between short or moderate pullback rallies will be there. 

It is weak on the chart as it is making lower tops & bottoms consistently, short term moving averages has given negative crossovers, medium term moving averages are on the verge of giving negative crossover(see my last post), but the only change this week is that it has bounced back within its long term moving averages range which is between 10388—10069(it changes every day) for 2-4-2018 and above its important bottom of 10033, so as long as it holds the lower band of the average i.e.10069 & bottom of 10033 it may move sideways to up for some time . Last but not the least there is huge negative divergence in the RSI on the weekly & monthly chart which indicates further downside is open and it is likely to break 9788 level for sure and may seek further lower levels also in coming weeks/months.  I once again reiterate that (see my earlier post) It may gain some strength only once it moves above it long term moving average range and it may regain the up momentum once it moves above 10552.40 and sustain consistently on the closing basis.

Its broad range for now is between 10388---10292.50---10277---10253---9951.90 and its range for the week starting from 2.4.18 is between 10207.90---9951.90. Moving down it will find critical support point at 10069---10033---9982.75---9951.90---9919.44—9914, sustained break below 10033 will trigger the fall and sustained break below 9951.90 & 9914 will accelerate the fall. Similarly moving up it will face stiff resistance at 10159---198---227.30---253---292---347---388. Since the overall technical setup is weak, so chances of going down is fairly high in coming days off course with relief rallies from time to time.

TRADING STRATAGY

In view of the above observation, the trend is clearly down and the long term uptrend is also threatened therefore it is suggested to adopt sell on the rise strategy now. But since it is above its important bottom of 10033 and within the long term moving average range, so it may move sideways to up for some time before moving down again, therefore short trade can be tried either if it breaks 10069 & 10033 mark and sustain with a stop loss of above 10120 or on the rise and the possible sell point for 2-4-2018 could be at 10191/10243—10253/10277 but not above10277 with a stop loss of above10295. The range for the week is 10207.90---9951.90 and since it is above its important points as mentioned above , so long call can also be attempted near 10069 or 10033but not below it with a stop loss of below10000.  It is important to mention here that if it opens up with a huge up gap then avoid long trade and can try short trade if price permits, similarly if it gaps down then avoid short trade and can try long trade if price permits. The bias is down therefore for safe trader it is suggested to avoid long calls till it shows visible sign of bottoming out.    

Remark: - The long term uptrend is threatened, but since it is above its important bottom of 10033 and within the long term moving average (the lower band is at 10069.99) range, therefore it may provide opportunity for both side trade now depending on the price movement and as suggested above. But since it is in down trend, so long trade could be deceptive therefore if initiated should be handled with extreme caution and alertness. Short call seems a better option at appropriate points. I would prefer to try long call only if it moves above its long term moving average upper band of 10388(for now) and sustain. The bias is hugely bearish as of now.    

Disclaimer:-The view expressed here are solely of the author and he is not at all responsible in any way for the outcome of the trade you enter based on the above view.

Kindly note that make your cost your stop loss in favorable  trade and then trail it as the price move up/down to gain maximum profit and avoid losses. Use support and resistance levels as entry, exit, target and trailing stop loss points. DO NOT TRADE WITHOUT STOP LOSS.

Note: Price stated here is of spot market.

Contact me for strategic guidance to enter and exit trade.